Europe and Israel are producing more startup 'mafias' than ever despite tech rout
Europe and Israel mint an average of five tech startups for every venture-backed company with a valuation of $1 billion or more, according to a new report from the venture capital firm Accel.
Of the 353 «unicorn» companies in the region, 221 have spun out 1,171 new tech-enabled startup companies as employees at these firms left to start up their own ventures, Accel said, citing Dealroom data.
A similar report from the firm last year showed that, out of 344 VC-backed unicorns, 201 led to 1,018 new startups being created.
The biggest examples of companies whose former talent went on to establish new companies include Spotify, which spawned 32 new companies, Delivery Hero, which generated 32, and Criteo, from which 31 new startups were born.
Such companies are referred to in the startup world as «mafias» — and no, they're not like the mobs of the Italian-American gangster films. Startup mafias have existed for decades. These «mafias,» which are firms started by employees of other tech firms, have historically led to the creation of some of the largest tech companies known today.
From U.S. fintech giant PayPal, Elon Musk went on to start electric-car maker Tesla and space exploration firm SpaceX, for example, while Peter Thiel co-founded the big data company Palantir and is now a renowned investor with his Valar Ventures and Founders Fund VC firms.
VC investors say that those entrepreneurs came from a culture of risk-taking in Silicon Valley that, for many years, hasn't existed in the same way in Europe. It began to take shape with the advent of maturing internet platforms like Skype, from which Niklas Zennstrom started VC fund Atomico and Taavet Hinrikus co-founded fintech giant Wise.
«When I got started like 30 years ago
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